2026 Appropriation Bill delay, recipe for further breach of CBN Act, BOFI, ECOWAS criteria —Economists

With less than two months to the end of the fiscal year, the Federal Government’s failure to present the 2026 Appropriation Bill to the National Assembly has triggered renewed concerns about Nigeria’s fiscal credibility, macroeconomic stability, and compliance with regional convergence standards.

Economists warn that the delay could worsen existing breaches of key legislation, including the Central Bank of Nigeria (CBN) Act, the Banks and Other Financial Institutions (BOFI) Act 2020, and the ECOWAS Macro-economic Convergence Criteria.

The Senate recently attributed the delay to the Executive’s inability to submit detailed performance reports on the 2024 budget as well as projections for the 2025 capital component—documents needed before the legislature can proceed with the Medium-Term Expenditure Framework (MTEF) for 2026–2029. The clarification has not eased public anxiety.

Instead, analysts say the late budget cycle is creating fiscal uncertainty, weakening planning across federal Ministries, Departments and Agencies (MDAs), and sending negative signals to investors at a time when states have already started drafting and defending their 2026 budgets.

“There is a breakdown of the January–December budget framework, and this has consequences,” one fiscal policy expert said. “You cannot implement capital projects or instil expenditure discipline when the Executive is struggling to submit a draft budget at the tail end of the year.”

Earlier directives by the Budget Office had asked MDAs to prepare personnel cost estimates in anticipation of a timely MTEF approval. That optimism now appears misplaced, as the slowdown threatens government execution capacity, capital spending efficiency, and macro-fiscal coordination.

Economists say persistent delays in the budget cycle fuel fiscal dominance—where government excessive borrowing pressures the central bank—leading to further violations of statutory limits on CBN overdraft financing.

The CBN Act, BOFI Act 2020, and the ECOWAS Convergence Criteria all require that lending to the Federal Government through Ways and Means not exceed 10 per cent of the previous year’s revenue and must be repaid within the same financial year. Nigeria has breached these limits repeatedly.

Professor Ken Ife, a development economist, described the trend as dangerous and destabilising.

He warned that weak MTEF processes, poor fiscal responsibility benchmarks, and habitual deficit rollovers are eroding the credibility of the Fiscal Responsibility Act (FRA) 2007. Amendments to strengthen the Fiscal Responsibility Commission (FRC) remain pending in the National Assembly.

“Monetisation of deficits forces the CBN to finance government shortfalls. This injects massive, unsterilized liquidity, directly fueling inflation and undermining monetary policy independence,” he said. “It turns the CBN into the very source of instability it is mandated to contain.”

Experts also caution that the delay exacerbates Nigeria’s debt sustainability concerns. They call for aggressive non-oil revenue mobilisation, improved debt transparency, and the rebalancing of both domestic and external borrowing in line with FRA limits.

Policy analysts advocate additional revenue measures such as enforcing a 15 per cent ad-valorem levy on imported fuel under the Public Service Obligation framework and a 5 per cent penalty for non-compliance with the Domestic Crude Obligation requiring local supply before export.

Johnson Chukwu, the Managing Director of Cowry Assets Management Limited noted that although some macroeconomic indicators show improvement, the underlying structural weaknesses of the economy remain largely unaddressed.

“We’ve seen better monetary policy coordination with fiscal authorities compared to the previous administration,” he said. “But the structures of the economy have not changed. Government borrowing continues to rise despite trillions in revenue. Until the heavy lifting is done—reforms, revenue expansion, debt rationalisation—we will not see durable economic stability.”

As the clock ticks towards year-end, stakeholders warn that further delays in presenting the 2026 Appropriation Bill risk deepening fiscal instability, eroding investor confidence and weakening Nigeria’s progress toward macroeconomic convergence within the ECOWAS region.